Guillermo Furniture Store
For many years, Guillermo Navallez has owned and operated a small and profitable wood furniture making company in beautiful Sonora, Mexico. He has enjoyed an abundance of raw materials, low labor costs, and limited competition. This has recently changed due to a few significant events (1) new competitors from overseas, using high-tech automation manufacturing processes, resulting in exact furniture specifications at rock bottom prices and (2) Sonora, Mexico labor cost have dramatically increased due to emerging new industries and companies. Guillermo Furniture has been forced to reconsider his current business model and implement a change in strategy to remain in business and competitive (ACC561, Guillermo, 2009). Guillermo Furniture SWOT Analysis
Prior to addressing the outlined questions we must understand Guillermo Furniture Store’s current; Strengths, Weaknesses, Opportunities and Threats (SWOT). Managers use accounting information for many different types of decisions. Information uncovered in accounting provides; scorekeeping, attention directing and/or problem solving, but we first need to understand our current environment (Horngren, 2008). The first course of action for Guillermo Furniture is to have an objective SWOT analysis performed in order to have a clear picture of the company’s current position in the market and among the competition. Of course, a more detailed SWOT analysis would be needed for a more specific focus and direction. Strengths: Strengths identified during the SWOT analysis is an abundant supply of raw materials, inexpensive labor, and a market that allowed a price premium for quality. Weaknesses:
The Guillermo Furniture Company was shown to be weak in manufacturing process and technology when a larger competitor started operations in direct competition. This made the company’s market position uncompetitive due to lack of manufacturing automation and labor costs. Guillermo also...
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